I have a Roth IRA with Fidelity that I want to put some more money into but in not sure how to choose where to invest the money. I am set up right now with FIPFX, FZILX, and FZROX that my dad recommended when I started. Do I just distribute more money to those same ones or should I choose something else, and how do I know what's good? I kinda space out when trying to read about what to do because it's like reading a foreign language and the words don't mean anything to me.
Those are good funds individually, most people here would probably recommend sticking with them since you are already with Fidelity. Together, they are an odd and kind of counterintuitive mix.
So, what's good:
1) Low cost. Not the cost of individual shares, but rather the fees involved. Sometimes there are fees for buying or selling, but anything recommended here isn't going to have that. Otherwise, your "expense ratio" which is your cost to hold the funds. Pretty much anything below 0.2% is good and within margin of error of tracking the fund's index. Uh oh, what's that mean?
2) Index funds. Index funds are investment funds that track a given index. So in the case of your FZROX fund, it roughly tracks the total US stock market index. If the stock market goes up, your investment goes up, and vice-versa. There is some slight variation between the funds and the index they track, but they will be very close. Index funds are generally low cost since they are passive - they don't have a guy who spends his day buying and selling stocks (or bonds) out of the fund. It just follows the market. Index funds, or at least the total market variety that often get associated with the term "index fund," also generally have the benefit of diversity.
3) Diversity. This is good because it means one "thing" won't tank your portfolio. That thing could be a single company, like the company you work for. Or it could be a sector of the market, like Real Estate. If your entire retirement savings is put into your company's stock, that means your entire retirement could be in trouble if the company struggles. If you are invested in a total market index, your company struggling would likely barely be a blip on the radar.
4) Staying the course. This year kind of sucks, but that doesn't mean you should sell your funds. Stay the course and don't worry about drops like we've seen lately, on average the total market goes up every year. And it's hard to consistently beat the increase of the total market.
Optional 5) Target date. Your FIPFX fund is a target date fund. These are entirely hands-off, basically a whole retirement portfolio in a single fund. These often contain a mix of total market stock and bond funds, split between US and non-US markets. More or less the same funds described above, but with the target date fund your investments are automatically rebalanced as your approach retirement based on the year of your target date fund. In your case, it's targeting retirement in about 2050. These generally cost a little more than a basic index fund in terms of fees, but not enough eliminate a good target date fund from consideration. For some, it's worth the peace of mind and simplicity. You can pretty much treat it like a savings account. Other funds, like FZROX and FZILX, need some input from you to keep your portfolio in balance.
Balance is entirely a personal preference thing and not something that you can really get clear cut advice for. Things like stocks vs bonds or US vs non-US. I think that's covered in the OP. But so is most of the above.
So you can probably see why I called that mix counterintuitive. FIPFX is a hands-off target date fund. The other two are total market index funds, but require you to determine the balance between US (FZROX) and international (FZILX) investment.
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